Why Health Canada’s Enflonsia approval matters for Merck (MRK)

Merck (MRK) just picked up Health Canada approval for Enflonsia, an RSV monoclonal antibody for newborns and infants. This adds a fresh respiratory asset alongside recent earnings that highlighted ongoing demand for Keytruda.

Merck’s recent Enflonsia approval lands on top of a cluster of headlines, including Q4 2025 earnings, fresh 2026 guidance, and a reaffirmed quarterly dividend. All of this arrives while the share price has climbed 40.55% over 90 days and delivered a 44.95% total shareholder return over the past year, suggesting momentum has been building rather than fading.

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The stock is up 40.55% in 90 days and sits just above the average analyst target, yet a 40.88% intrinsic discount score hints at a different story. Is Merck still mispriced, or has the market already baked in future growth?

Most Popular Narrative: 8.3% Overvalued

The most followed narrative on Merck pegs fair value at $112.55 versus the last close at $121.93, so the story sits slightly ahead of the price.

Merck & Co. presents a compelling long-term investment case, underpinned by its innovative capacity and strong market position. The current valuation, considering both quantitative metrics and qualitative factors, suggests an attractive entry point for investors willing to weather near-term volatility.

Curious how a company facing a major patent expiry still commands a premium? This narrative leans heavily on R&D depth, oncology strength and future profit expectations to justify that call.

Result: Fair Value of $112.55 (OVERVALUED)

However, this view could crack if Keytruda’s 2028 patent expiry hits harder than expected or if new drug approvals face tougher regulatory or competitive pushback.

Another View on Merck’s Valuation

The user narrative characterizes Merck as 8.3% overvalued at $121.93 versus a $112.55 fair value, but our DCF model points the other way. Using that approach, Merck at $121.93 trades below an estimated future cash flow value of $206.25, which frames the stock as undervalued instead.

When two thoughtful methods land on opposite sides of fair value, it raises a real question for you: which set of assumptions about growth, cash flows and risk appears more realistic?

Build Your Own Merck Narrative

If you see the numbers differently or simply prefer to test your own assumptions, you can spin up a fresh Merck story in minutes: Do it your way.

A great starting point for your Merck research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.